Why Should You Lease a Car?
So why would you want to lease a car anyway? Isn’t it smarter to just “own” a car? In this article, I’ll explain the specific reasons why you should seriously consider leasing your next car.
1. You don’t want to pay a large sum of money up front to buy a car. When it comes to shopping for a car, many people tend to look for used cars that are available from private sellers. This is problematic for two reasons. First, because it’s a used car and because it’s coming from a private seller, you can never be absolutely sure about the mechanical condition of the vehicle and you’ll never be completely sure about how well the previous owner kept up with the scheduled maintenance of the vehicle. Believe it or not, there are people out there who never get an oil change. The 2nd reason why this is problematic is that you’ll have to fork over a large sum of money for a car that may or may not turn out to be in a stable, working condition.
2. You understand that there is nothing special about “owning” a car. Many people these days are obsessed with owning everything. You’ll often hear people telling you that they finally were able to buy a house and that they now “own” their home instead of renting. This gives them a great feeling of satisfaction and seems like a great accomplishment to them. While buying a home may seem like a great accomplishment and a worthwhile investment in some cases, this is simply not true with cars. I’m sure that I don’t have to tell you that the monetary value of a vehicle does not increase whatsoever; it only decreases. Whether you lease a vehicle, finance a vehicle, or buy it cash, you lose money at some point. However, what makes a lease different is that you “lose” this money over several years instead of all at once. You have the ability to lease a vehicle without paying a dime in down payment before you drive out of the dealership in your new car. I don’t know about you, but I would much rather pay $300 a month to lease a car instead of forking over $20,000 to buy a car.
3. You want to drive a different car every few years. Honestly, I don’t care what kind of car you drive now, but if you aren’t bored of driving it, I’m sure you will be bored eventually. Most people generally want to try different things and want to really enjoy the cars that they are driving. Leasing a car allows you to drive a car for a few years and give it back with no pressure to buy the car. Once your lease is over, you can lease a new car and once again you have dozens of different cars to choose from. If you were to finance the car or buy it with cash, you would be stuck with the car until you sell it.
4. You have a good, stable monthly income. If you have a stable monthly income, it makes a lot of sense to lease a car. Thanks to the ability to lease cars, you no longer need to spend months saving money in order to purchase a new car. You do not even need to save money for a down payment, because you are not required to place a down payment. Of course, this would raise your monthly payments, but again, this is assuming that you have a good, stable monthly income.
5. You want a problem-free car that does not have any maintenance issues. In the first few years of a car’s life, there are generally very few maintenance issues to be concerned about. When I leased my first Honda, all I had to do over the 3 year term of the lease was to get about 8 oil changes. Keep in mind that if your leased car does happen to have any mechanical issues, it should be covered under the manufacturer’s warranty. When you bring your car in to the shop for oil changes, they typically conduct an inspection to check for any mechanical issues. So the way I see it is that with a lease, I’m able to drive a brand new car for a few years, without having to worry about it breaking down and even if it does break down, I am not liable to pay for any repair costs. In fact, during my lease, I got a free tire alignment and my car batter was also changed for free because the service department found that it was weak.
6. You like the idea of paying to drive a car as opposed to paying to own a car. What you are essentially doing when you lease a car is you are paying to drive a car for a certain number of years. After a certain number of years when your lease has reached its maturity date, you simply return the car to the dealer. Then, you can lease another brand new vehicle worry-free for another 3 years. It’s simple and easy.
7. You don’t have to worry too much about dings and scratches on your car. Read this one carefully. Even though the car is not yours and you will end up returning the car, you should do what you can to keep the car in a good condition. This means you should never try to intentionally damage the car by any means. Instead, what I’m trying to say here is that you will most likely have what car manufacturer’s typically call “wear and tear” damage to your car. This is basically damage to your car from normal use. Most car manufacturer’s offer wear and tear coverage where up to a certain dollar amount, the dealer will not charge you for any damage to the car due to normal wear and tear. My previous Honda came with a $1,500 wear and tear coverage. This means that when the inspector came to my home to inspect the vehicle before I had to return the car, he reported any problems associated with the car and roughly how much it would cost to repair those problems. If the total repair costs came out to less than $1,500, I wouldn’t be liable to pay anything. For those of you that are curious, the repair costs came out to $100 for one of the tires that seemed to have very little tread left. Since the total came out to only $100, I returned the car without having to pay a dime in repair costs. Keep in mind that I had several noticeable dings and scratches that weren’t a problem either.
8. You understand that a monthly payment for a leased car is less than the monthly payment for a financed car. There is no doubt about this one. When you lease a car, you are paying for the depreciation of the car which is somewhere around 40% of the value of the vehicle depending on the term of your lease. This constructs the bulk of your monthly payment. However, when you finance a vehicle, you are paying for the ENTIRE price of the car over a certain number of years. Obviously there are other fees associated with the both a leased and financed cars like interest and sales tax but we’re concerned with what makes up the bulk of the payment.